2018-03-27 07:42:392018-03-27 07:42:39https://quickbooks.intuit.com/ca/resources/payment-processing/small-business-cryptocurrency-bitcoin-alternativesPayment ProcessingEnglishLearn about alternatives to Bitcoin called altcoins so you can make an informed cryptocurrency investment. Discover new use cases for...https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2018/03/Financial-expert-offers-cryptocurrency-alternatives-to-client.jpghttps://quickbooks.intuit.com/ca/resources/payment-processing/small-business-cryptocurrency-bitcoin-alternativesBeyond Bitcoin: Other Cryptocurrency You Should Know

Beyond Bitcoin: Other Cryptocurrency You Should Know

Bitcoin (BTC) has evolved from an obscure internet currency to a household name. Early adopters have enjoyed substantial monetary gains, and many new cryptocurrency enthusiasts are hoping for the same results. These days, while Bitcoin remains the most well-known cryptocurrency, there are plenty of other digital tokens that utilize blockchain technology besides Bitcoin, many that still have significant room to grow. These lesser-known tokens are called altcoins, and many of them have different functions and goals beyond just acting as a way to store and transfer value. Learn about some of the most exciting altcoins out today so you can make an informed investment.

The Price of Altcoins

As you look into cryptocurrency, you’re going to notice that the value of tokens varies widely, and those prices change by the minute. While it may be tempting to seek out the least expensive altcoins, the reality is that a token’s value is based more on its market cap, which is found by multiplying the coin’s price by its circulating supply. Coins with low market caps may cost more, but they also have plenty of potential to continue growing in value. Most high-value coins can also be purchased in fractions, so don’t let the price of one coin determine whether or not you invest. Instead, analyze the use cases of each coin, read their white papers, then invest if you believe in the long-term potential of the coin.

Ethereum (ETH)

Ethereum is arguably the most popular of all of the Bitcoin rivals. Fans of Ethereum love this coin because it’s an open, decentralized software platform that allows users to take out smart contracts and build applications according to their needs. A smart contract is when the terms of an agreed-upon contract are automatically fulfilled when other terms are met.

For example, if you plan to purchase goods from China to resell at a higher price in Canada and you don’t want to pay for all of the goods up front, you may be able to negotiate a smart contract that allows you to pay half now and half later. Once the agreed-upon amount of time has passed and you have the chance to recoup your investment plus profit, the other half of your bill is automatically fulfilled using the Ether currency. Essentially, the Ethereum network allows you to create ‘when-this-happens-then-this-happens’ contracts that cannot be altered once they’re set in place, ensuring that both parties reach their desired outcome.

VeChain (VET)

VeChain is another altcoin that goes beyond the standard currency use. It’s a supply chain network that allows companies to track the origins and movements of products across the entire supply chain. It’s especially useful for preventing counterfeit goods. For example, a luxury handbag company can incorporate scannable VeChain chips into their products. When those chips are scanned, information about the manufacturing process is automatically sent to the VeChain blockchain, proving the handbag is authentic. Being able to identify exactly where goods came from proves that they’re real. The VeChain token, VET, is the in-house currency that companies pay to use the VeChain network. As of 2018, VeChain continues to expand its reach, with goals of creating a large-scale platform similar to Ethereum.

Litecoin (LTC)

If Bitcoin is gold, Litecoin is silver. Litecoin is essentially a more streamlined version of Bitcoin. As of 2018, it’s quite a bit cheaper than Bitcoin, and it can be sent faster. Litecoin’s main use case is to send a large volume of small transactions quickly.

Ripple (XRP)

Most cryptocurrencies were created as alternatives to traditional banking institutions, but Ripple aims to work with banks. Ripple’s goal is to facilitate fast, affordable payments from anywhere in the world. Ripple is similar to Western Union in that users can send money virtually anywhere, but the difference is that it’s faster and cheaper.

Monero (XMR)

Privacy is one of the most appealing aspects of cryptocurrency, and Monero takes that concept a step further. While Bitcoin is anonymous, transactions can still be viewed on the blockchain. Monero is completely untraceable, giving individuals and businesses the ultimate in privacy.

IOTA (MIOTA)

Unlike most cryptocurrencies, IOTA doesn’t rely on blockchain technology, instead using its own distributive ledger system called Tangle. The name stands for Internet of Things Application. The token’s creators and investors hope that as the internet continues to grow, all sorts of devices are going to be connected. IOTA’s use case is to facilitate free micropayments in that ecosystem.

Where to Buy Altcoins

If you plan on buying altcoins, you may need to buy one coin and then transfer it to an exchange where it can exchanged for your preferred token. As of 2018, the most popular place to buy Bitcoin, Bitcoin Cash, Ethereum, and Litecoin is Coinbase. Coinbase accepts many different payment methods, including CAD, allowing you to buy coins with your bank account, debit card, or credit card. Once you purchase one of those coins, you can send it to an altcoin exchange if you want to switch it out for an altcoin. Binance is the most popular altcoin exchange, as of 2018.

Before you invest in cryptocurrency, make sure you spend some time doing your homework. The cryptocurrency arena is risky, but you can reduce that risk by educating yourself. There are countless other altcoins on the market, so don’t feel limited only to the ones listed here. You may want to join online communities and talk to people you know who own cryptocurrency so you can get a well-rounded view of the market. After all, plenty of people have their own motivations, and bias is naturally present when money is at stake. Do your due diligence, and remember that cryptocurrency is a long-term investment. It may be a bumpy ride along the way, but blockchain technology has enormous potential. Only invest what you can afford to lose, and make sure you store your coins safely in a trusted online or offline wallet.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.